From the Bench: Snowplow Accident—Does the City Have Immunity?

GOVERNMENT IMMUNITYMinnesota No-Fault Automobile Insurance Act Michael Gould, a city snowplow driver, crossed the center line in his snowplow and collided with Donald Fernow’s vehicle. Fernow brought a personal injury action against the city and Gould in district court. At about the same time, Fernow’s insurance company sought arbitration against the city under Minnesota’s No-Fault Automobile Insurance Act (No-Fault Act). The city moved for summary judgment in the district court action, arguing that Fernow’s claim was barred by statutory discretionary immunity, official immunity, and snow and ice immunity. The district court denied the city’s summary judgment motion, reasoning that there was a material fact question regarding whether immunity should apply. The Minnesota Court of Appeals affirmed.

The arbitrator, who had granted the city a delay in proceedings pending the district court’s determination of the summary judgment motion, subsequently awarded the insurance company $23,326 in basic economic loss benefits, concluding that “the defense of governmental statutory immunity does not apply to this matter.” The city filed a motion in district court to vacate the arbitration award, arguing that the arbitrator had improperly ruled on the legal issue of immunity. The district court denied the motion and confirmed the arbitration award. The Minnesota Court of Appeals reversed the district court’s decision. The Minnesota Supreme Court affirmed the Court of Appeals’ decision and held that claims of immunity, including necessary questions of fact, must be determined by the district court before the merits can be arbitrated under the No-Fault Act. Fernow v. Gould, 835 N.W.2d 8 (Minn. 2013). Note: LMCIT represented the city.

MINNESOTA GOVERNMENT DATA PRACTICES ACT Subcontract data Johnson Controls, Inc. (Johnson) contracted with a school district to provide design services for the construction and renovation of some schools. Johnson subcontracted with Architectural Resources, Inc. Marshall Helmberger, a newspaper editor, submitted a request to Johnson under the Minnesota Government Data Practices Act (MGDPA) for a copy of its subcontract with Architectural Resources. Johnson denied the request. Helmberger requested and received an advisory opinion from the commissioner of the Department of Administration that concluded that Johnson was required to provide Helmberger with a copy of the subcontract because Johnson “is performing a governmental function for the District.” Johnson continued to withhold the subcontract.

Helmberger filed a complaint with the Office of Administrative Hearings, but an administrative law judge (ALJ) dismissed the complaint. The Minnesota Court of Appeals reversed the ALJ’s decision. The Minnesota Supreme Court reversed the Court of Appeals’ decision, and held that a private business that contracts with a school district is not required to comply with the requirements of the MGDPA in the absence of a contractual notice. The MGDPA requires a government entity that contracts with a private person to perform any of its functions to include in the contract terms that make it clear that all of the data created, collected, received, stored, used, maintained, or disseminated by the private person in performing those functions is subject to the MGDPA’s requirements, and that the private person must comply with those requirements as if it were a government entity. The school district’s contract with Johnson did not include this contractual notice. Helmberger v. Johnson Controls, Inc., N.W.2d (Minn. 2013).

LAND USENonconforming use rights Wapiti Park operates a campground in the city. When Wapiti Park opened in 1973, the city did not have a zoning ordinance. In 1980, the city adopted a zoning ordinance that designated campgrounds as a non-permitted use in Wapiti Park’s district. In 1983, the city amended its zoning ordinance to allow campgrounds as a conditional use in Wapiti Park’s district. In 1984, Wapiti Park applied for and was granted a conditional use permit (CUP). Wapiti Park originally had a building at the campground containing an office, bar, laundry, restroom, and gathering space. The building was completely destroyed by fire in 1999. Wapiti Park applied for and received an interim use permit that was valid for 10 years in order to construct and use a replacement building. When the interim use permit expired in 2010, the city approved Wapiti Park’s renewal application, subject to compliance with numerous conditions, including those in the CUP. The city later inspected Wapiti Park and discovered violations of the CUP’s conditions, including use of the campground as a permanent residence by many individuals. The city gave Wapiti Park several months to comply with the CUP’s conditions. When Wapiti Park failed to do so, the city adopted resolutions denying renewal of the interim use permit and revoking the CUP.

Wapiti Park sued, seeking several declarations, including that its operation of the campground was a nonconforming use; it did not need to obtain the CUP to continue that use; the CUP was no longer in effect and enforceable against it; and it had a right in 2000 to replace the original building and resume its use without first obtaining an interim use permit. The district court ruled in Wapiti Park’s favor, holding that the campground was a nonconforming use that could not be terminated by revoking the CUP.

The Minnesota Court of Appeals reversed and ruled in the city’s favor, holding that the campground did not become a nonconforming use until 1988 and was subject to the conditions in the 1984 CUP.

The Minnesota Supreme Court reversed the Court of Appeals’ decision and remanded the case to the district court. The Supreme Court held that a landowner does not surrender the right to continue a nonconforming use by obtaining a CUP unless the landowner validly waives that right, and that the record did not demonstrate that Wapiti Park made such a waiver. The Supreme Court also held that the city lacked authority to terminate Wapiti Park’s nonconforming use by revoking the CUP, but noted that a city has authority under state law to “impose upon nonconformities reasonable regulations … to protect the public health, welfare, or safety.” Finally, the Supreme Court held that the city had authority to require Wapiti Park to obtain an interim use permit to replace the destroyed accessory building and to resume using it, and that Wapiti Park may not lawfully use the replacement building until it obtains renewal of the interim use permit and complies with its conditions. White v. City of Elk River, N.W.2d (Minn. 2013). Note: The League filed an amicus brief in the city’s support.

EMINENT DOMAINMinimum Compensation Statute The county condemned George Cameron’s liquor store for a road project. Cameron sought damages under the Minimum Compensation Statute, which provides: “When an owner must relocate, the amount of damages payable, at a minimum, must be sufficient for an owner to purchase a comparable property in the community.” The trial court identified one comparable property, and awarded damages based on its fair market value plus awarded additional damages because the comparable property was smaller. The comparable property sold before the taking date. Cameron argued that because no comparable property was available for purchase on the taking date, he was entitled to damages sufficient to construct a new liquor store. Cameron also argued that a fair market value analysis for determining damages is not allowed under the Minimum Compensation Statute.

The Minnesota Court of Appeals ruled in the county’s favor. The Minnesota Supreme Court affirmed and held that the term “community” should be defined as “an identifiable locality that has a socially or governmentally recognized identity, or a group of such localities.” The Supreme Court noted that depending on the facts, the relevant “community” could be a neighborhood, district, town, village, city, county, region, or other similar locality. The Supreme Court also held that the phrase “comparable property” should be defined as an existing property, regardless of its availability for purchase, “that has enough like characteristics and qualities to another piece of property that the value of one can be used to determine the value of the other.” The Supreme Court noted that such characteristics and qualities may include, among others, location, use, physical features, economic attributes, financing terms, conditions of sale, market conditions, and legal characteristics such as zoning and other restrictions. Finally, the Supreme Court held that the lodestar method, in which a court determines the number of hours reasonably spent on litigation and then multiplies that number by a reasonable hourly rate, applies to an award of attorney fees under the Minimum Compensation Statute. County of Dakota v. Cameron, N.W.2d (Minn. 2013). Note: The League filed an amicus brief in the county’s support.

Written by Susan Naughton, research attorney with the League of Minnesota Cities. Contact: snaughto@lmc.org or (651) 281-1232.